Falling Between The Cracks Of The California Pedigree Law

Most prescription pharmaceuticals distributed in California pass from manufacturer to pharmacy through wholesale distributors, but a small percentage are sold by the manufacturer directly to doctors and clinics. An even smaller percentage are sold through small companies licensed as kit manufacturers or distributors to dental offices, fire departments, ambulance companies and other carriers of emergency medical kits. These transactions are just as open to the introduction of illegitimate products as the larger transactions that we normally think of when we talk about the use of drug pedigrees, but because they are outside of the ordinary, they are at risk of falling between the cracks. That is, they might be a lot more complex, or not even possible, under the California pedigree law.

DIRECT TO PHYSICIAN’S OFFICE

Certain types of drugs are sold by manufacturers directly to the dispensing organization or person without going through wholesale distributors. The reasons vary and they are not really important. All we need to know is that these type of transactions exist as a normal part of the complex thing we call the U.S. pharmaceutical supply chain. In most instances I believe the manufacturer and the physician’s office or clinic that is doing the dispensing/administering benefit from close relationships which ensure that the manufacturer can monitor the drug’s use and reaction in patients.

In California, after July 1, 2017, these transactions will need to include the passing of drug pedigrees. More specifically, the manufacturer will be required to give the buyer a pedigree for each drug within the shipment, and the buyer will be independently required to receive, update and retain those pedigrees. What makes this out of the ordinary is that the number of customers that these manufacturers must be able to send ePedigrees to may be quite large in comparison to manufacturers who only sell through wholesale distributors. For some manufacturers this could turn out to be hundreds of customers in California.

This large number of pedigree destinations may be a problem for manufacturers who fall into this special category if a distributed pedigree model is used. This includes GS1’s Drug Pedigree Messaging Standard (DPMS) and the group of distributedNetwork Centric ePedigree (NCeP) models defined by GS1. In these models, ePedigrees or ePedigree information would typically pass directly from seller to buyer. That means a given seller would typically have some kind of secure data connection with all of their customers so that the ePedigree data can be sent whenever a shipment is made. Each buyer would need one secure data connection for each manufacturer and wholesaler they buy drugs from (see “U.S. Pharma Supply Chain Complexity”).

This makes the central or semi-central models much more attractive for these types of manufacturers and their customers because their data connection costs would be significantly lower than the distributed models. The only problems are, GS1 has not yet completed the NCeP standard(s) (now referred to by GS1 as the Event Based Traceability Standard), and the California Board of Pharmacy has not yet blessed any type of NCeP model, let alone the central or semi-central models (see “The Board of Pharmacy Must Respond To Ideas For Making EPCIS Work”). It looks like this may force these companies (and everyone else along with them) to use DPMS which would cause them to spend a lot of time and money setting up and maintaining a large number of data connections. And that assumes that their customers—the doctors and small clinics—are able to setup and maintain a data connection with the manufacturer too.

EMERGENCY MEDICAL KITS

Direct to pharmacy manufacturers may find that complying with the California pedigree law is more costly than they would expect, but there exists another type of company that may find it difficult to even continue doing business after the pedigree law goes into effect. These are the small manufacturers and wholesalers who offer emergency medical kit maintenance services (for one example, click here). These companies are in the business of selling and then replenishing the various components—including some prescription pharmaceuticals—found in the kits that are in nearly every school health room, ambulance, fire department and dental office.

For example, a small dental office doesn’t need to buy a full 2-pack of epinephrine injection pens, they just need one on hand at all times in case a patient has an anaphylactic reaction while in their care. Apparently this is rare but is something that a good dentist would be prepared for (and may be required in some states). If they were to buy a 2-pack of injector pens, often neither would get used before the expiration date and so both pens would need to be discarded and replaced.

To avoid the practice of discarding two pens at a time, these wholesalers distribute full kits and keep them stocked with small quantities of emergency medical devices and drugs—like single epinephrine injection pens. They keep track of the expiration dates of each component in each kit maintained by their service and when a component expiration date approaches, or the component gets used, they replenish just that one component. In this way, the kit is always ready for the next emergency situation.

Now an epinephrine injection pen sounds to me like a drug-device combination which may be exempt from the California law (see your lawyer, and also see “Are Your Drugs Exempt From The California Pedigree Law?”). But other prescription drug components in such a kit might include an albuterol inhaler (which also sounds like a drug-device combination) and nitroglycerin tablets, which are solely a prescription drug and therefore not affected by the combo device exemption.

The kit maintenance company keeps their customer’s kits stocked with units that are typically smaller than the smallest saleable unit intended by the manufacturer. That is, smaller than the level that must be tracked by a pedigree and so small that the “packages” would not always be serialized by the manufacturer. Does that mean the kit maintenance company does not need to worry about pedigrees or serialization? I doubt it. Does that mean the kit manufacturer just needs to serialize the kit?

“…by combining in a kit two or more drugs, or a drug with a device, a kit manufacturer creates a new “saleable unit” which, unlike a traditional repackaging of a single drug where the existing pedigree still captures all of the pertinent drug information, creates new information. That saleable unit (e.g., the surgical tray) will be separately serialized and will be the subject of a pedigree initiated by the kit manufacturer, linked to/associated with the existing drug pedigree(s). …”

I do not think this language applies to the maintenance of an emergency medical kit. You may easily disagree, but I believe the reference in the Board’s Q&A document to a “kit” only describes the original sale of a kit, and this would not include the replenishment of one or two drug components within the kit at a later time—particularly the replenishment of a drug like the nitroglycerine pills.

At this point, I can’t figure out how these companies will be able to remain within the law and remain in business without changing their business model in some way, although you must remember, I am not a lawyer. Maybe your lawyer can figure it out.

These are just two types of businesses that may end up falling between the cracks of the California law when it is eventually in full effect in 2017. There are bound to be others. Can you think of any others? If so, leave a message and describe them.

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2 thoughts on “Falling Between The Cracks Of The California Pedigree Law”

An issue I have been wrestling with for a while as well. Let’s look at an even more, in fact very common scenario – drop shipments. CaBoP has essentially stated that the ePedigree needs to follow the product. Manufacturers don’t generally have trading relationships with drop ship customers – the manufacturer’s trading relationship is generally with the wholesaler that supplies the customer that is being drop shipped. So if a manufacturer needs to send an ePedigree with a drop shipment of product where does the ePedigree go? Chances are the drop ship customer will not need to be able to receive pedigrees until quite some time after the manufacturer is required to send them.

Anonymous,
Drop shipments are definitely a problem. Thanks for raising them. As I understand it, during the period of time when the manufacturer is required to produce ePedigrees but their customer is not yet required to receive pedigrees, manufacturers should plan to simply keep a record of the pedigree themselves and are not expected to deliver them to the customer. The same is likely true of the facilitator of the drop shipment, typically a wholesaler.

However, the practical execution of a drop shipment today does not easily fit into the notion of pedigree due to timing. I generally agree with those who have pointed out that drop shipments should be considered one of the safest types of transactions in the supply chain today because they are (or should be) directly from the manufacturer to the dispenser. The fact that a third-party handles the financial transaction after-the-fact does not inject any additional risk of potential harm. Clearly the California Board of Pharmacy does not agree with that idea.

Watch for more discussion and rule-making around drop shipments in next week’s Board of Pharmacy pedigree-specific meeting in Sacramento. I’ll be there.

Dirk.

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Dirk is the founder of RxTrace where he writes regularly on the intersection between the pharmaceutical supply chain, track and trace technology, standards and regulatory compliance. He has written hundreds of essays on those specific topics. A logical thinker, Dirk is skilled at making complex technical topics understandable to non-technical readers and listeners.

An Electrical and Computer Engineer by education, Dirk has worked as a consultant, software architect and automation engineer during a career spanning 30 years. Overall, Dirk's thought leadership has helped to expose hidden complexities and reveal surprising consequences and implications of drug serialization and pedigree laws around the world.

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